Ship shape

Business is so good at the Port Authority it needs to expand, and has its sights set on buying surplus U.S. Steel land

Ian Hamilton, vice-president of business development and real estate at the Hamilton Port Authority, says long leases are the key benefit for tenants.

Ian Hamilton, vice-president of business development and real estate at the Hamilton Port Authority, says long leases are the key benefit for tenants.

Stories by Amy Kenny
The Hamilton Spectator

Forget art — agriculture is the new steel for the Hamilton Port Authority.

“Everything to do with agriculture is growing,” says Ian Hamilton, vice-president of business development and real estate for the port. “We’ve probably, over the last few years, lost about four million tonnes of cargo that would have travelled through the U.S. Steel facility annually and been able to replace that with agriculture.”

Agricultural commodities account for more than 19 per cent of the port’s total tonnage, a growth that helped boost numbers in 2014. The total amount of cargo that moved through the port last year was 10,526,732 metric tons, a five per cent increase over 2013 and the highest overseas tonnage to come through the city in a decade.

Agribusinesses that have been here for years have recently invested in the port.

In 2012, fertilizer supplier Agrico Canada Ltd. invested $2.5 million in a liquid bulk terminal that doubled its storage capacity to 40,000 tonnes. That same year, agribusiness Richardson International Ltd., part of the port since ’98, sunk $6 million into facility expansion. Bunge Canada, another agribusiness, has also grown since its early days as Canada Packers in 1946.
bythenumbers
As well, Port management has changed over the years. Prior to 2001, the Hamilton Harbour Commission managed the waterfront, but that year the Hamilton Port Authority was created.

Operating as an independent company, the port is owned by Transport Canada — a department of the federal government that’s responsible for developing regulations and policies around transportation in Canada.

Under them, the port owns the land it manages — 620 acres that serve more than 140 tenants from Bayfront Park to the lift bridge.

Hamilton says they work regularly with the city, co-operating in land-use plans and trying to navigate zoning. They also pay more than $5 million a year in taxes to the city. Hamilton adds that companies are attracted to our port for a variety of reasons.

First off, it’s not unusual for the Hamilton Port Authority to offer leases of 20 to 40 years.

This allows companies to make the kind of long-term plans they might not be able to make in a city like Toronto, where Hamilton says waterfront leases are sometimes year-to-year.

Transportational infrastructure also plays a major role in attracting business to the port. Goods can be moved to and through the port by water, an efficient highway system as well as access to both CP and CN rail lines.

Hamilton says that’s something no port this side of Thunder Bay can claim.

He says that’s not the only way they distinguish themselves.

“I think we’ve tried to take a fairly different approach to being a port authority as well. We really wanted to get away from being a bureaucratic pseudo-government agency and really understand our customers.”

Part of that, Hamilton says, is investing in those customers.

In 2011, when Fluke Transport was considering leaving Hamilton’s Procter & Gamble building, the HPA attracted them to Pier 15 and has since spent roughly $3 million to $4 million in upgrades to the on-site building.

The port also offered Sylvite a leasehold investment (meaning the money will come back to the port in the form of rent) so the company could build two new tanks at its Pier 12 site. It also extended a dock wall from 800 to 1,000 feet so Lafarge could more easily load and unload vessels.

Since 2009, Hamilton says roughly $300 million have been put into new facilities across the port’s 620 acres. “We’ve got skin in almost every one of our tenant’s businesses,” he says.

The problem the port now faces is expansion. “Right now we have close to 50 open files that we’re working on for customers who want to locate or expand into Hamilton, and we don’t have the capacity to meet all of that demand,” he says. Existing and prospective lease holders want additional land and dock access.

Mike Kirkpatrick, vice-president of sales and marketing at Federal Marine Transport, says that if his bulk shipping company has another year like 2014, it will definitely need more space. “The challenge right now, going forward, which the port is trying to address, is they have no more land. You just can’t set up a dock facility because you need the navigational channels and the dock facility and the dock walls and all the depths so the ships can access it and that’s very expensive,” says Kirkpatrick.

While Hamilton says the port is open to acquiring any land, he acknowledges that nothing jumps off the page the way the U.S Steel lands do. That parcel, which measures roughly 800 acres, would more than double the current holdings of the HPA.

He says they are currently in talks with U.S. Steel and its chief restructuring officer. Hamilton’s hope is that they have something worked out by late 2015 or early 2016.

“We would certainly like to have expanded our inventory of land to try to take care of this pent-up demand. I think Hamilton is very well-received by industrial customers and as long as we have the right land bank we will continue to attract them.”

portofhamilton
akenny@thespec.com
905-526-2487 | @Amyatthespec

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